U.S. Stocks Fall After Warsh Speech Boosts Bond Yields
U.S. stocks edged lower after Federal Reserve Chairman Kevin Warsh indicated that the central bank’s fight against inflation was not yet complete.
On Friday, global stock markets experienced a volatile session as traders placed bets on an interest rate hike after Federal Reserve Chair Kevin Warsh's remarks at the annual economic symposium in Jackson Hole. The MSCI's global equities gauge declined, while short-dated U.S. Treasury yields and the dollar rose. Warsh stated that the central bank would require more effort to bring inflation back to its 2% target.
This acknowledgment, combined with the hawkish tone, led to a surge in the probability of a rate hike at the September meeting, jumping to 55.7% from 35.4% on Thursday. Notable declines were seen in major U.S. stock indexes, including the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite, with the Russell 2000 and technology sector underperforming as well.
The 2-year note yield and other benchmark U.S. bond yields also rose in response to the hawkish signals from Warsh.
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- Stocks fall while dollar, bond yields rise as Warsh prompts rate hike bets channelnewsasia.com
